MasterCard Europe's recent decision to let European merchants charge customers for using a MasterCard credit card may be a tactic to win over fee-weary merchants while differentiating the brand from Visa.
Etienne Goosse, the senior vice president of corporate affairs of MasterCard Europe, said it was not a response to pressure from merchants or regulators. Rather, he said, it was meant to help position MasterCard as the more flexible payment brand.
"It is appropriate to no longer restrict the freedom of parties in the market," Mr. Goosse said in a telephone interview Tuesday. "This will introduce transparency and flexibility."
MasterCard Europe's board approved the change at its July 3 meeting. It will take effect Jan. 5 and apply in the 25 countries of the European Union plus Norway, Iceland, and Liechtenstein.
Government action had already freed merchants in a few EU countries to impose such charges. One of those countries is the United Kingdom, and last week the home furnishings chain Ikea announced that it would begin charging customers there $1.25 per credit card transaction to cover the cost of accepting credit cards.
But Mr. Goosse said that did not influence MasterCard and is not the beginning of a trend.
A Celent Communications LLC analyst said MasterCard's decision to let other merchants follow Ikea's lead could make the card association appear more merchant-friendly. "It is a way for MasterCard to compete more aggressively against Visa," said Gwenn Bezard, a senior analyst at the Boston consulting company. "Such a move could be designed to attract small merchants."
Visa Europe responded to the move by reaffirming its intention to retain its ban on merchant surcharging. Mr. Bezard said the split could swing smaller merchants towards MasterCard. It is more common in Europe than here for merchants to accept Visa or MasterCard but not both.
David Masters, a Visa Europe spokesman, said in an e-mail: "Visa's no-discrimination rule, which prohibits merchants from surcharging consumers for making purchases with cards unless local law allows, exists for the benefit of consumers and has been found to be in the interest of competition." Visa got a "positive decision" on the rule from the European Commission three years ago, he wrote.
Both Visa and MasterCard have run into problems with European regulators over interchange rates. In 2003 the European Commission issued a statement of objections challenging MasterCard Europe's cross-border multilateral interchange fee. MasterCard has said in filings that it is in discussions over what changes it might need to make to those fees.
But Mr. Goosse said regulators played no role in the decision to drop the surcharge ban. "There was no pressure from anybody," he said. "We believe surcharging will stay a limited phenomenon. It balances the system to incent issuance and acceptance."
